FinCEN Releases Notice of Proposed Rulemaking on Beneficial Ownership Disclosure Requirements: Seven Things To Know

On December 7, 2021, the Financial Crimes Enforcement Network (“FinCEN”) invited public comment on its proposed rule (the “Proposed Rule”) implementing the beneficial ownership disclosure requirements of the Corporate Transparency Act (“CTA” or “Act”). Comments to the Proposed Rule are due on February 7, 2022.

As discussed in our prior client alert here, under the CTA, which was passed as part of the 2020 Anti-Money Laundering Act, Congress created a new federal framework for the reporting, disclosure, and use of beneficial ownership information. The CTA aims to combat the illicit use of shell companies to hide the proceeds of crime, and transfer some of the burden of identifying the owners of such companies from financial institutions to the government itself. The Proposed Rule represents one of the first substantial steps in FinCEN’s implementation of the CTA.

This alert summarizes seven key takeaways from the Proposed Rule.